Tuesday, July 15, 2014

The Intersection of Copyright Law and Collection Law or Bow Wow Wow Yippee Yo Yippee Yea Part 2

One could create an entire law school curriculum on the
legal battles of George Clinton.The
latest reported case from the United States Court of Appeals for the Ninth
Circuit illustrates the unique relationship between entertainment law,
copyright law and creditor's rights.

Apparently George
Clinton owed his former lawyers, Hendricks & Lewis over 1.7 million dollars
in legal fees.The firm sued Clinton,
received a judgment and was able to convince the trial court to appoint a
receiver and take custody of four of Clinton's iconic master recordings
including "The Electric Spanking of War Babies" and "One Nation
Under A Groove" for the purpose of maximizing "the income stream from
the Funkadelic master sound recordings without selling or otherwise permanently
disposing of the copyrights".(Note
that this is different from the initial press reports that seemed to indicate
that the law firm ended up with ownership of the masters).The goal apparently is for the receiver to
exploit the recordings, pay the judgment creditor and then return the masters
to Clinton.

The
copyright portion of the case is fascinating.Clinton signed the typical recording agreement with Warner Brothers in
1975 acknowledging that the records were "works made for hire" or
alternatively agreeing that he had assigned all rights in the recordings to the
label.Warner Brothers in turn
reassigned the recordings to Clinton in 1993.

Clinton
argued that the assignment of his recordings by the Court to the receiver
violated Section 201(e) to the Copyright Act which prevents authors from
"involuntary transfers" of their copyrights.However Section 201(e) clearly states that it
only applies "when an individual author's ownership of a copyright or of
any of the exclusive rights under a copyright has not been previously
transferred voluntarily by that individual author."By the terms of the Warner Brothers agreement
Clinton was either not the original "author" of the sound recording
or being the original author he voluntarily assigned his rights to the record
company, thereby losing the protections of Section 201(e).

The case is
primarily relevant because it
establishes the important point that in some instances copyrights can be
subject to execution to satisfy judgments and that although copyright is in the
exclusive domain of federal law the
courts will look to state law to interpret how the execution will proceed from
state to state.This is important to
both collection lawyers and to artists and writers and other copyright owners seeking
to protect their copyrights in the event of litigation.